Invention vs. Innovation

Everyone loves The Inventor. It’s pretty easy to see why: She is the person who got the ball rolling, he was the bright spark who came up with the idea, they are the people who created new products, services, systems and thoughts that provide great improvements in our everyday lives.

Accordingly, we’ve structured many parts of our economy and our legal systems to protect and encourage them. Concepts such as patents, copyrights and intellectual property were established to give inventors and creators and extra degree of protection.

A few hundred years ago, when these protections were first being conceived, it was understood that they were short term taxes on society to reward creators and inventors, with the hope that it would have a net positive societal benefit in the long run. Giving inventors a short-lived monopoly over their new idea was a ‘necessary evil’ to give them the incentive to create, without which (it was assumed) much less invention and creation would be done, which is a bad thing indeed. Short term pain, long term gain.

Here is an excerpt from a speech given by Lord Macaulay in 1841 to the British House of Commons as they discussed a new copyright bill:

The principle of copyright is this. It is a tax on readers for the purpose of giving a bounty to writers. The tax is an exceedingly bad one; it is a tax on one of the most innocent and most salutary of human pleasures; and never let us forget, that a tax on innocent pleasures is a premium on vicious pleasures. I admit, however, the necessity of giving a bounty to genius and learning. In order to give such a bounty, I willingly submit even to this severe and burdensome tax. Nay, I am ready to increase the tax, if it can be shown that by so doing I should proportionally increase the bounty.

Macaulay’s argument is very well reasoned one – If giving the creator a legal monopoly over the ownership of their thoughts and inventions can be proven to increase the benefit to society (more/better books, music, products, services etc.) then it is a good thing.

Now here’s the problem – The bounty isn’t worth the tax. Don’t get me wrong, I do think that the total benefit to society of new inventions, works of art and creative thoughts are hugely invaluable, I just don’t think that the original creator should be credited with providing most of the benefit.

The Innovator

This is where I draw the distinction between the Inventor and the Innovator. The Inventor creates the new idea, but it’s often The Innovator that brings it to market. Without The Inventor we would have no new ideas, but without The Innovator those new thoughts might never reach people to provide a benefit.

They imagined a simple machine that would eschew software installed on a hard drive in favor of accessing applications online. Data — videos, documents, pictures — would be stored in Oracle databases instead of on the computer itself. In place of a robust operating system, this machine would work with programs and files through browsers like Netscape Navigator.

In essence they were coming up with the idea of net books and cloud computing – as I’m sure many people at the time were. The article continues:

It was a powerful idea, one that would enchant companies and analysts throughout the IT industry. But it would ultimately fail.

This is an example of how an idea that we know is great (because net books are selling like hotcakes) can still end up failing. If we had applied our inventor-centric view of the world to this idea back in 1999, we would have been happy if Ellison had acquired full intellectual property rights for his idea. After all, he was the idea man and we needed to reward him and others for coming up with great ideas.

But Ellison didn’t get the monopoly on this idea and right now we can all agree that that is undoubtedly a good thing. In the decade since then there has been a slow and steady growth in the area of cloud computing and an explosive growth in the sales of net books. This has come about through slow but steady improvements, incremental upgrades, iterations and developments by thousands of people, none of whom necessarily “invented” the original concept. This is the value of The Innovators. They take an invention and bring it to market, make it more efficient, make it affordable, create smarter distribution channels to get it into peoples hands and improve it again and again over time.

When considering the total benefit for society that comes from a new technology like this, it is obvious that the lions share is created by The Innovators and not The Inventor. Consider all the benefits we get from the modern aviation industry. A small (but significant) portion of that is from the Wright Brothers, but the majority is from all The Innovators in the industry over the last number of years.

A Note of Caution

Recognising the importance of The Innovator can help us view the modern legal system from a different perspective. Intellectual property concepts were always intended as a means to an end. They granted creative businesses and individuals a certain amount of protection so that in turn they could provide a benefit to society.

But how do they affect The Innovator? As you might have realised by now, their affects can be quite detrimental. If Larry Ellison and Oracle had spent the last decade suing and intimidating any small company that tried to progress the development of net books and cloud computing we certainly would have been worse off than we are today.

Great new internet services that provide us innovative ways to discover content (like YouTube, google, spotify etc.) seem to be getting sued for copyright infringement almost every other day. Any time an innovative technology is released it seems inevitable that it will be sued for patent infringement, most likely by a competitor jealous of the success they couldn’t achieve – most often because they didn’t give customers the same level of value.

Is The Inventor’s bounty worth this tax? I don’t think so.

We need to realise that ideas by themselves do not provide huge benefit to societies, the value lies in making them a viable reality. A new technology will often remain an unwanted product until someone makes it simple and easy to use. An invention is no use to me unless I can afford to get my hands on it. I can’t enjoy a new song if I can’t first discover it then listen to it. A great book is no use to me unless I get to read it.

The benefit of The Inventor is rarely felt without the work of The Innovator and we can’t afford to keep punishing one to protect the other.